IN THE DEBT RECOVERY APPELLATE TRIBUNAL AT CHENNAI Dated the 19^th day of March, 2025 PRESENT: HON’BLE MR. JUSTICE G. CHANDRASEKHARAN CHAIRPERSON MA 4/2023 & MA 5/2023 (arising out of AOR No.7/2017 in DCP No.5003 in OA No.209/2003 on the file of DRT-I, Bengaluru)

I. MA 4/2023 Between

1. Shri Narendra Kumar Lodha S/o Shri Pannalal Lodha, Flat No.301, R & S Kushekunj, Opp. Ware House, Mannagudda, Mangaluru 575 006.

…..Appellant And

1. Shri H. Govindaraj Rao, S/o H. Ramachandra Rao, R/o No.4203, Anriya Dwellington Flats, L.G. Halli, 1^st Cross, Dollars Colony, RMV 2^nd Stage, Bengaluru 560 094.

2. M/s Navagiri Financce & Investments Pvt. Ltd.

Rep. by its Managing Director, Shri H. Govindaraj Rao, Having Office at Gautami;

No.62, Amarjyothi Housing Colony, Sanjaya Nagar, Bangalore 560 094.

3. The Karnakata Bank Ltd.

Iddaya Branch, Surathkal, Rep. by its Branch Manager, Mangaluru Taluk, Dakshinia Kannada District.

…..Respondents Counsel for Appellant : M/s Devaraj & Co.

Counsel for R1 & R2 : M/s Shivakumar & Suresh Counsel for R3 : M/s Ramalingam & Associates II. MA 5/2023 Between The Karnakata Bank Ltd.

Iddaya Branch, Surathkal, Rep. by its Branch Manager, Mangaluru Taluk, Dakshinia Kannada District.

…..Appellant And

1. Shri H. Govindaraj Rao, S/o H. Ramachandra Rao, R/o No.4203, Anriya Dwellington Flats, L.G. Halli, 1^st Cross, Dollars Colony, RMV 2^nd Stage, Bengaluru 560 094.

2. M/s Navagiri Financce & Investments Pvt. Ltd.

Rep. by its Managing Director, Shri H. Govindaraj Rao, Having Office at Gautami;

No.62, Amarjyothi Housing Colony, Sanjaya Nagar, Bangalore 560 094.

3. Shri Narendra Kumar Lodha S/o Shri Pannalal Lodha, Flat No.301, R & S Kushekunj, Opp. Ware House, Mannagudda, Mangaluru 575 006.

…..Respondents Counsel for Appellant : M/s Ramalingam & Associates Counsel for R1 & R2 : M/s Shivakumar & Suresh Counsel for R3 : M/s M. Devaraj & Co.

COMMON ORDER

1. These appeals are filed under Section 20 of RDDB & FI Act, challenging the order dated 30.7.2021 passed in AOR 7/2017 in DCP 5003 in OA

209/2023 by Learned Presiding Officer, DRT-I, Bangalore.

2. Respondents 1 and 2 in MA 4/2023 have filed AOR 7/2017 in DCP No.5003 under Section 30 of the RDDB & FI Act to set aside and quash the sale certificate dated 4.12.2017 and stay all further DCP Proceedings. After contest, AOR 7/2017 was allowed and sale conducted on 6.10.2007 and sale certificate dated 4.12.2017 have been set aside. Karnataka Bank Limited was ordered to refund the sale consideration to the auction purchaser Shri Narendra Kumar Lodha with simple interest at 9% per annum from the date of receipt of the same till the date of repayment. There was also a direction to the bank and the auction purchaser to get the sale certificate cancelled before the jurisdiction of concerned sub- Registrar within 30 days from the date of the order. The amounts deposited by the applicants in the said AOR 7/2017 are permitted to be appropriated towards the loan dues of the appellants with Karnataka Bank Ltd. . As against this order, Auction Purchaser Shri Narendra Kumar Lodha filed Appeal MA 4/2023 and Karnataka Bank filed MA 5/2023.

3. Learned Counsel for appellants submitted that Learned Presiding Officer had rejected all the grounds raised by the respondents 1 and 2 before the Tribunal below and allowed the AOR 7/2017 only on the ground of technical plea raised that there was non compliance of Rule 15 of Schedule II of Income Tax Act. It was held that when the first sale held on 7.9.2017 had not taken place for want of bidders, Recovery Officer ought to have gone for a fresh proclamation and not adjourned the case. In view of the fact that no fresh sale proclamation was issued. There is violation of Rule 15 of Schedule II of Income Tax Act. Rule 15 of Schedule II of Income Tax Act, reads as follows:

15. (1) The Tax Recovery Officer may, in his discretion, adjourn any sale hereunder to a specified day and hour; and the officer conducting any such sale may, in his discretion, adjourn the sale recording his reas